Employment Agreement - Cardiac Science Inc. and Guy R. L. Sohie
CARDIAC SCIENCE, INC.
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement") is dated as of
November 15, 2000 by and between GUY R.L. SOHIE ("Employee") and CARDIAC SCIENCE
INC., a Delaware corporation (the "Company").
1. Term of Agreement. This Agreement shall commence on the
date executed and shall be a term of twelve (12) months (the "Original Term").
This Agreement shall continue after the end of Original Term and shall
automatically renew for successive 12-month periods under the same terms and
conditions of this Agreement, with Compensation in Section 4, which may be
revised based upon mutual agreement. The Original Term and any 12-month period
commencing immediately after the end of any Term shall each be referred to as a
"Term."
2. Duties.
(a) Position. Employee shall be employed as
Chief Technology Officer and as such will have responsibility for the duties
typically associated with such positions and will report to the Company's Chief
Executive Officer and Board of Directors.
(b) Obligations to the Company. Employee agrees
to the best of his ability and experience that he will perform all of the duties
and obligations reasonably required of and from Employee pursuant to the express
and implicit terms hereof. During the term of Employee's employment relationship
with the Company, Employee further agrees that he will devote his business time
and attention to the business of the Company.
3. At-Will Employment. The Company and Employee acknowledge
that Employee's employment is and shall continue to be at-will, as defined under
applicable law, and that Employee's employment with the Company may be
terminated by either party at any time after the Original Term for any or no
reason. If Employee's employment terminates for any reason, Employee shall not
be entitled to any payments, benefits, damages, award or compensation other than
as provided in this Agreement. The rights and duties created by this Section 3
may not be modified in any way except by a written agreement executed by the
Company.
4. Compensation. For the duties and services to be
performed by Employee hereunder, the Company shall pay Employee, and Employee
agrees to accept the salary, stock options, bonuses and other benefits described
below in this Section 4.
(a) Salary. Employee shall receive a monthly
salary of $15, 416 per month. Employee's monthly salary will be payable pursuant
to the Company's normal payroll practices. In the event this Agreement is
extended beyond the Original Term, the base salary shall be reviewed at the time
of such extension by the Board of Directors, its Compensation Committee or the
Chief Executive Officer of the Company, and any increase will be effective as of
the date determined appropriate by the Board, its Compensation Committee or the
Chief Executive Officer.
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(b) Bonuses. Employee will be eligible to
receive an incentive bonus of $37,000 from the Company. Payment of said bonus
will be based on attainment of certain mutually agreed upon milestones, to be to
be paid as follows: $18,500 at six months from the date of employment and the
balance of $18,500 at the end of the Original Term.
In the event of Employee's Involuntary Termination (as
defined below), death or Disability (as defined below) or a Change of
Control (as defined below) during the term of this Agreement, the Company shall
pay to Employee or Employee's estate a pro rata portion of Employee's target
bonus for such year based on the portion of the year Employee worked for the
Company.
(c) Additional Benefits. Employee will be
eligible to participate in the Company's employee benefit plans of general
application, including without limitation, those plans covering medical,
disability and life insurance in accordance with the rules established for
individual participation in any such plan and under applicable law. Employee
will receive three (3) weeks paid vacation and will be eligible for sick leave
in accordance with the policies in effect during the term of this Agreement and
will receive such other benefits as the Company generally provides to its other
employees of comparable position and experience.
(d) Stock Options and Other Incentive Programs.
Employee shall be eligible to participate in any stock option or other incentive
programs available to officers or employees of the Company. Employee shall be
granted 100,000 stock options under the terms and conditions of the 1997 Stock
Option Plan approved by the board of directors.
(e) Reimbursement of Relocation Expenses.
Employee shall reimbursed by the Company for customary and reasonable relocation
expenses, including temporary housing. The Company shall pay relocation costs
(inclusive of closing costs) to cover general moving expenses. For a period of
up to three months, Cardiac will, if necessary, provide, (or reimburse you for
the cost) temporary local housing.
(f) Reimbursement of Business Expenses. Employee
shall be authorized to incur on behalf and for the benefit of, and shall be
reimbursed by, the Company for reasonable expenses, provided that such expenses
are substantiated in accordance with Company policies.
5. Confidential Information
5.1 Employee acknowledges that, because of his
employment hereunder, he will be in a confidential relationship with the Company
and will have access to confidential information and trade secrets of the
Company. Employee acknowledges and agrees that the following constitutes
confidential and/or trade secret information belonging exclusively to Company
(collectively "Confidential Information"):
(a) all information related to customers
including, without limitation, customer lists, the identities of existing, past
or prospective customers, prices charged or proposed to be charged to customers,
customer contacts, special customer requirements and all related information;
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(b) marketing plans, materials and techniques;
and
(c) all know-how, devices, compilations of
information, copyrightable material and technology and technical information,
relating to the business of the Company.
5.2 Employee agrees that except in the limited
performance of his duties under this Agreement, Employee shall not use for his
own benefit or disclose to any third-party Confidential Information acquired by
reason of his employment under this Agreement or his former status as officer of
the Company.
5.3 This Section 5 shall survive termination of
this Agreement.
6. Company Property.
6.1 Any patents, inventions, discoveries,
applications or processes, software and computer programs devised, planned,
applied, created, discovered or invented by Employee in the course of his
employment under this Agreement and which pertain to any aspect of the business
of the Company, or its subsidiaries, affiliates or customers, shall be the sole
and absolute property of the Company, and Employee shall make prompt report
thereof to the Company and promptly execute any and all documents reasonably
requested to assure the Company the full and complete ownership thereof.
6.2 All records, files, lists, drawings,
documents, equipment and similar items relating to the Company's business which
Employee shall prepare or receive from the Company shall remain the Company's
sole and exclusive property. Upon termination of this Agreement, Employee shall
return promptly to the Company all property of the Company in his possession and
Employee represents that he will not copy, or cause to be copied, printed,
summarized or compiled, any software, documents or other materials originating
with and/or belonging to the Company. Employee further represents that he will
not retain in his possession any such software, documents or other materials in
machine or human readable forms.
6.3 This Section 6 shall survive termination of
this Agreement.
7. Termination of Employment and Severance Benefits.
(a) Termination of Employment. Employee's
employment under this Agreement shall terminate immediately upon a Change of
Control (as defined below) and may be terminated during the Original Term (or
any subsequent Term) upon the occurrence of any of the following events:
(i) The effective date of a written
notice sent to the Company from Employee stating that Employee is electing to
terminate his employment with the Company voluntarily ("Voluntary Termination");
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(ii) The Company's determination that
it is terminating Employee without Cause, which determination may be made by the
Company at any time at the Company's sole discretion, for any reason or no
reason ("Termination Without Cause");
(iii) A change in Employee's status such
that a Constructive Termination (as defined below) has occurred;
(iv) The Company's reasonable, good
faith determination that it is terminating Employee for Cause (as defined below)
("Termination for Cause"); or
(v) Following Employee's death or
Disability.
(b) Severance Benefits. Employee shall be
entitled to receive severance benefits upon termination of employment only as
set forth in this Section 7(b):
(i) Voluntary Termination. If
Employee's employment terminates by Voluntary Termination, then Employee shall
not be entitled to receive payment of any severance benefits. Employee will
receive payment for all salary and unpaid vacation accrued as of the date of
Employee's termination of employment and Employee's benefits will be continued
under the Company's then existing benefit plans and policies in accordance with
such plans and policies in effect on the date of termination and in accordance
with applicable law.
(ii) Involuntary Termination. If
Employee's employment terminates due to Termination Without Cause or
Constructive Termination (collectively, "Involuntary Termination"), Employee
will be entitled to receive payment of severance benefits equal to Employee's
regular monthly salary for an additional six (6) months following the date of
such Involuntary Termination (the "Severance Period"). Such payment shall be
made ratably over the Severance Period according to the Company's standard
payroll schedule. On the date of such Involuntary Termination, Employee shall
also receive the pro rata portion of Employee's target bonus for such then
current Term, based on the portion of the current Term that Employee has worked.
Health insurance benefits with the same coverage provided to Employee prior to
the termination (e.g. medical, dental, optical, mental health) and in all other
respects significantly comparable to those in place immediately prior to the
termination will be provided at the Company's cost over the Severance Period.
Any unvested stock options or shares of restricted stock held by Employee as of
the date of Employee's termination of employment shall continue to vest through
the end of the Severance Period according to the vesting schedule set forth in
any agreement between Employee and the Company governing the issuance to
Employee of such securities.
(iii) Termination for Cause. If
Employee's employment is terminated for Cause, then Employee shall not be
entitled to receive payment of any severance benefits. Employee will receive
payment for all salary and unpaid vacation accrued as of the date of Employee's
termination of employment and Employee's benefits will be continued under the
Company's then existing benefit plans and policies in accordance with such plans
and policies in effect on the date of termination and in accordance with
applicable law.
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(iv) Termination by Reason of Death or
Disability. In the event that Employee's employment with the Company terminates
as a result of Employee's death or Disability (as defined below), Employee or
Employee's estate or representative will receive all salary and unpaid vacation
accrued as of the date of Employee's death or Disability and any other benefits
payable under the Company's then existing benefit plans and policies in
accordance with such plans and policies in effect on the date of death or
Disability and in accordance with applicable law. In addition, Employee's estate
or representative shall also receive the pro rata portion of Employee's target
bonus for the current Term, based on the portion of the current Term that
Employee has worked.
(v) Change of Control. Notwithstanding
the preceding clauses of this Section 7(b), upon a Change of Control, Employee
will be entitled to receive payment of severance benefits equal to Employee's
regular monthly salary for a period of six (6) months following said Change of
Control. (the "Change of Control Severance Period"). Such payment shall be made
ratably over the Change of Control Severance Period according to the Company's
standard payroll schedule. On the date of such Change of Control, Employee shall
also receive the pro rata portion of Employee's target bonus for the current
Term, based on the portion of the current Term that Employee has worked. Health
insurance benefits with the same coverage provided to Employee prior to the
Change of Control (e.g. medical, dental, optical, mental health) and in all
other respects significantly comparable to those in place immediately prior to
the Change of Control will be provided at the Company's cost over the Change of
Control Severance Period. Any unvested stock options or shares of restricted
stock held by Employee on the date of Employee's termination of employment shall
become 100% vested and shall be immediately exercisable.
(vi) Noncompete. If Employee shall at any
time during a Severance Period or a Change of Control Severance Period, act as
an owner (other than a shareholder in a publicly traded company) or employee of
a business that directly competes with the business conducted by the Company as
conducted on the date of Employee's termination of employment, then, effective
upon Employee's commencement of such activities as a competing owner or
employee, Employee shall not receive any severance payment or other benefits
under Sections 7(b)(ii) or (v) beyond what he would have received had he been
Terminated for Cause. The term directly competes, as set forth in this Section
shall be limited to companies that derive at least 50% of their revenue from the
sales of external defibrillators and accessories.
8. Definitions. For purposes of this Agreement,
(a) "Cause" for Employee's termination will
exist at any time after the happening of one or more of the following events:
(i) Employee's willful misconduct or
gross negligence in performance of his duties hereunder, including Employee's
refusal to comply in any material respect with the legal directives of the
Company's Board of Directors so long as such directives are not inconsistent
with the Employee's position and duties, and such refusal to comply is not
remedied within fifteen (15) working days after written notice from the Company,
which written notice shall state that failure to remedy such conduct may result
in Termination for Cause;
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(ii) Dishonest or fraudulent conduct
related and materially adverse to the activities of the Company, a deliberate
attempt to do a material injury to the Company, or conduct that materially
discredits the Company or is materially detrimental to the reputation of the
Company, including conviction of a felony; or
(iii) Employee's knowing and intentional
material breach (which can not be cured) of any element of the Company's
Confidential Information and Invention Assignment Agreement, including without
limitation, Employee's theft or other misappropriation of the Company's
proprietary information.
(b) "Constructive Termination" shall be deemed
to occur if (i)(A) there is a significant reduction in Employee's duties,
positions or responsibilities causing such position to be of reduced stature or
responsibility or, (B) a reduction in Employee's base compensation or benefits,
or (C) Employee's refusal to relocate to a facility or location more than 30
miles from the Company's current location; and (ii) within the 60-day period
immediately following such material change or reduction Employee elects to
terminate his employment voluntarily.
(c) "Disability" shall mean that Employee has
been unable to perform his duties hereunder as the result of his incapacity due
to physical or mental illness, and such inability, which continues for at least
60 consecutive calendar days or 90 calendar days during any consecutive
twelve-month period, if shorter, after its commencement, is determined to be
total and permanent by an independent and impartial physician selected by the
Company and its insurers and acceptable to Employee or to Employee's legal
representative (with such agreement on acceptability not to be unreasonably
withheld).
(d) "Change of Control" shall mean the
occurrence of any of the following events: (i) an acquisition of the Company by
another entity by means of any transaction or series of related transactions
(including, without limitation, any reorganization, merger or consolidation but
excluding any merger effected exclusively for the purpose of changing the
domicile of the Company), or (ii) a sale of all or substantially all of the
assets of the Company (collectively, a "Merger"), so long as in either case (x)
the Company's stockholders of record immediately prior to such Merger will,
immediately after such Merger, hold less than 50% of the voting power of the
surviving or acquiring entity, or (y) the Company's stockholders of record
immediately prior to such Merger will, immediately after such Merger, hold less
than 60% of the voting power of the surviving or acquiring entity and a majority
of the members of the Board of Directors of the surviving or acquiring entity
immediately after such Merger were not members of the Board of Directors of the
Company immediately prior to such Merger.
Notwithstanding the above, in the event that (i) Employee's
employment is terminated by the Company or a successor to the Company other than
for Cause (as defined below), or (ii) Employee's job duties, responsibilities
and requirements are materially reduced or changed such that they are
inconsistent with Employee's prior duties, responsibilities and requirements, in
either case in connection with, or as a result of, a Change of Control, 100% of
the option that has not yet become exercisable shall become exercisable on the
effective date of such termination, reduction or change.
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9. Successors. Any successor to the Company (whether direct
or indirect and whether by purchase, lease, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company's business and/or
assets shall assume the obligations under this Agreement and agrees expressly to
perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the
absence of a succession. The terms of this Agreement and all of Employee's
rights hereunder shall inure to the benefit of, and be enforceable by,
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
10. Miscellaneous Provisions.
(a) No Duty to Mitigate. Employee shall not be
required to mitigate the amount of any payment contemplated by this Agreement
(whether by seeking new employment or in any other manner), nor, except as
otherwise provided in this Agreement, shall any such payment be reduced by any
earnings that Employee may receive from any other source.
(b) Amendments and Waivers. Any term of this
Agreement may be amended or waived only with the written consent of the parties.
(c) Sole Agreement. This Agreement, including
any Exhibits hereto, constitutes the sole agreement of the parties and
supersedes all oral negotiations and prior writings with respect to the subject
matter hereof.
(d) Notices. Any notice required or permitted by
this Agreement shall be in writing and shall be deemed sufficient upon receipt,
when delivered personally or by a nationally-recognized delivery service (such
as Federal Express or UPS), or 48 hours after being deposited in the U.S. mail
as certified or registered mail with postage prepaid, if such notice is
addressed to the party to be notified at such party's address as set forth below
or as subsequently modified by written notice.
(e) Choice of Law. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of California, without giving effect to the principles of conflict of
laws.
(f) Severability. If one or more provisions of
this Agreement are held to be unenforceable under applicable law, the parties
agree to renegotiate such provision in good faith. In the event that the parties
cannot reach a mutually agreeable and enforceable replacement for such
provision, then (i) such provision shall be excluded from this Agreement, (ii)
the balance of the Agreement shall be interpreted as if such provision were so
excluded and (iii) the balance of the Agreement shall be enforceable in
accordance with its terms.
(g) Counterparts. This Agreement may be executed
in counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.
[Signature Page Follows]
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The parties have executed this Agreement the date first written
above.
CARDIAC SCIENCE INC.
By:
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Title:
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Address: 16931 Millikan Avenue
Irvine, CA 92606
Fax: (949) 587-0357
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Guy R. L. Sohie, Ph.D.